Before donating, make sure a charity is credible.

December 03, 2006|YaVONDA SMALLS Tribune Staff Writer

When families gather around the table for Thanksgiving dinner, it's easy for them to remember how blessed they are. And how others in the community aren't so fortunate. So as the Christmas season approaches, giving to charity becomes a tradition for many families. "The spirit of giving is what this season's all about," said Marjorie Stephens, communications director for the Better Business Bureau of Northern Indiana. But what many people don't realize is that their donations don't always reach those for whom it was intended. Some of the charities they donate to are out-and-out scams, whose aim is to swindle donors out of their hard-earned money. Others are legitimate charities, but they use professional fundraising firms that eat up 80 to 90 percent of the donations they receive for expenses -- meaning the actual charity gets hardly anything at all. Unfortunately, consumers don't always take the time to question the credibility of the groups they're giving to. There are many people who are trusting, Stephens said. And scammers continue to take advantage of that. "I do not see it going away," Stephens said. "Absolutely not." Asking questions Before giving money to just any organization, consumers shouldn't be afraid to ask questions about the charity, said ConsumerAffairs.com, an independent Web-based consumer news and resource center. For example, how much of a donation goes toward the actual charity? How will the contribution be used? And consumers don't have to always take a charity's word for it. They can check out the organization's standing for themselves through resources such as the Wise Giving Alliance -- a joint project of the National Charities Information Bureau and the Council of Better Business Bureaus. The alliance has certain standards that charities must meet to gain its endorsement. Also remember that, under Indiana law, any professional solicitor is required to register with the attorney general's office, said Sarah Rittman of the attorney general's office. But charities that use their own volunteers are not required to register, she said. Another way to check a charity's credibility is to check its Web site, said Dennis Freeland, executive vice president for Goodwill. Of course, if you're interested in giving to a local charity, it never hurts to visit the organization's physical office to see how it looks and what its mission and values are, he said. "In the case of Goodwill, we're very fortunate," Freeland said. "It's pretty easy to recognize Goodwill and what we're all about." Sticking with organizations that are already reputable is your best bet, officials say. These include organizations such as the Salvation Army, Hope Rescue Mission, St. Vincent de Paul Society and many others. Officials further advise consumers to pay close attention to a charity's name. Some scammers use names that are similar to those of legitimate groups. Stephens, of the Better Business Bureau, also says to be wary about opening your door to a stranger. Some people go door to door, posing as representatives of a reputable charity. And sometimes, they will even use children to execute their mission, which can make it easy for consumers to give into the scam. But consumers should never feel pressured to make an immediate contribution. "If it's a reputable charity, they'll come back tomorrow," she said. Donating via phone/Web When approached by telephone solicitors, consumers should ask to receive written information about the charity through the mail. If the group doesn't send any solid information, that should raise a red flag. And be careful when receiving calls from those who say they represent local "law enforcement" or "firefighter" charities. Ask them to send you information before you make a decision to donate. In fact, don't ever give personal information -- such as credit-card or checking-account numbers -- over the phone. And the same skepticism is vital when surfing the Web. If you want to donate to a charity online, don't trust an organization simply because it has a .org in its URL -- not all such Web sites are legitimate. And always look for an online charity's physical mailing address and telephone number before deciding to donate. Tax deductions Instead of sending cash to a charity, write a check made payable to the full name of the charity -- not to the person collecting the donation. Consumers are also advised to ask for a receipt and hold onto it for documentation at tax time. Speaking of which, remember that not all donations are tax deductible. Even if an organization is tax exempt -- meaning it doesn't have to pay taxes -- that doesn't mean contributions are tax deductible. The Internal Revenue Code defines more than 20 categories of tax-exempt organizations, but contributions to only a few of these categories are also tax deductible, according to the Wise Giving Alliance. It's best to check with a local IRS office to find out whether donations to a particular charity will fall into the tax-deductible category.